Aug 9 (Reuters) - Shares of GasFrac Energy Services Inc fell as much as 17 percent on Tuesday, a day after the Canadian company reported quarterly loss that was much wider than market expectations.
GasFrac, which develops LPG fracturing technology to extract oil, said customers are spending more on oil and liquids-rich reservoirs as natural gas prices remain soft.
Natural gas prices NGc1 averaged $4.38 per million British thermal units (mmBtu) during April-June and were at close to their historic lows.
The extremely wet spring breakup period in Canada made the ground too soft to drive heavy trucks and had severely hindered GasFrac’s equipment utilization in the second quarter.
“GasFrac’s Canadian operations tend to be more vulnerable to adverse weather conditions than most pressure pumpers - this is because GasFrac does not perform large programs on pads in the Montney or in the Horn River,” said Andrew Bradford of Raymond James.
Field conditions are still wet and sub-par in many areas, and they will hamper the company’s efficiencies until later in the fourth quarter, Bradford said.
GasFrac, whose key customer is Canada’s No.3 oil producer and refiner Husky Energy Inc , applies a method of fracturing oil and gas wells using propane. The use of propane results in better well productivity.
On Monday, the company posted a wider-than-expected second-quarter loss.
Shares of the company were down 35 Canadian cents at C$7.80 in late morning trade on the Toronto Stock Exchange. They earlier touched a low of C$6.76. (Reporting by Bhaswati Mukhopadhyay and Ankur Banerjee in Bangalore; Editing by Gopakumar Warrier)